Two bills have been introduced in the Maryland legislature that could potentially tax some advertising services.

HB 1051 would extend the states sales tax to include direct mail advertising services, commercial photography and art services, public relations and other business consulting services.

SB 152 is Governor Martin O’Malley’s proposed budget and includes a tax on products digitally downloaded. According to the governor’s staff, the intent of the proposal is to tax consumer products such as music, books, software and games delivered electronically. However, the language of the bill is written very broadly and could be interpreted to include business to business transactions such as work product digitally delivered by ad agencies to clients.

Representatives of AAF and AAF-Baltimore were in Annapolis on Feb. 14 to visit with lawmakers and explain how the bills could cost Maryland jobs by putting advertising agencies in the state at a competitive
disadvantage relative of out of state agencies.

Currently we are hearing reports of this possibly happening in South Carolina and there is a statute in North Carolina as well.